A lot of people find a roommate through a mutual friend or a social media posting, but Jan S. and Valerie P. met when their children married each other.
After years of battling Boise’s rising housing costs from separate apartments, they opted to find a two-bedroom place together last summer to save on rent and keep each other sane during the COVID-19 pandemic. Bunking together is the only way to keep their living expenses manageable on fixed incomes, but they are still worried about their landlord selling the house they rent or adding hundreds of dollars to their monthly bill.
They requested BoiseDev not print their last name due to anxieties over losing their housing.
“It just gets more and more difficult,” Valerie, 74, said. “The apartment I was living in over a year ago before this place doubled the rent. Even though my daughter was helping me, neither one of us thought it was worth it.”
Seniors all over the Treasure Valley are under pressure as rents, property taxes and other expenses are on the rise while their fixed incomes stay the same. As the cost of living continues to rise, many of them are having to make difficult choices to meet their needs.
Some are fleeing high property taxes on large houses that have more than quadrupled in value to rentals, where they are met with rapidly rising rents and the constant worries about being displaced when a property changes hands. Others remain in their high valued homes wondering where they would go if they sold.
Fixed income for rising costs
Valerie and Jan are better off than most, but they say their expenses don’t leave much breathing room.
Their rent for a two bedroom, two bathroom home in Southeast Boise is $2,500 a month. They split expenses evenly, take turns cooking and completing other household chores to cut down on costs, but with their monthly incomes of $1,800 and $2,000 respectively they aren’t living large.
“We both have to pay extra insurance because Medicare doesn’t pay anything so that’s $280, dental plan is $50, and then now rent, utilities, food, car insurance, renters insurance,” Jan, 70, said. “I am personally taking money from my IRA account that was supposed to be for traveling or other things.”
Mark Wight, an attorney specializing in elder law and President of Idaho Estate Planning, said the high cost of living for seniors impacts more than just their bottom lines. He said high prices forces seniors to downsize or move further away from downtown, leaving them without the support to safely live at home through the end of their life.
“If you want to stay in the home you’re in and you want to buy a smaller one then you’re moving further out of downtown, you have less access to services and there’s no buses,” Wight said. “If you don’t drive it is so amazingly difficult for our older population in the west. If you take away their license or they give it up, they’re giving up a tremendous amount of freedom because they’re stuck at home.”
The equity question
Many seniors in the Treasure Valley own homes they have lived in for decades that are completely paid off and are hundreds of thousands of dollars more valuable than when they bought it. On paper, they are swimming in assets, but they can’t easily access that wealth.
“Do I sell my house and move into independent living?” Wight said, about seniors in this position. “Well, yes except that capital gains tax is going to be pretty high so in order to make this work, we have to sit down with an accountant and figure out what the capital gains tax is going to be. The equity is nice, but it all comes at a cost.”
There are a variety of tools for seniors to use. This includes reverse mortgages, where the homeowner borrows against the value of their home, or the state’s circuit breaker program that assists low-income homeowners. As part of the legislature’s property tax package at the end of the 2021 session, the state increased the amount of assistance available to homeowners in the program. But, in exchange, homeowners with a home valued higher than 125% of the median price for their county will be excluded starting next year.
Sen. C. Scott Grow, R-Eagle, brought forward another program during the 2021 session to add another option for older homeowners. His bill made changes to the state’s property tax deferral program to allow anyone making less than $50,000 annually to elect for the state of Idaho to pay their local property taxes and then put a lien on the home. When the home is sold, the proceeds from the home plus 2% interest pay the state back.
“There may be some that say ‘hey I would rather have this for my kids inheritance and have the state give me the money,’ but my feeling is there is a limit to how much the state is going to pay,” Grow said. “We’re already paying $20 million for the circuit breaker and this has a higher advantage and the state will pay a higher tax that helps those who are in a higher valued home.”
What about medical care?
No matter where you decide to grow old, there’s a cost associated with it.
Some people who decide to live out their final years at home are faced with the difficulty of finding in-home healthcare to take care of them or their loved ones. Wight said as housing has gotten more expensive, so have the prices of these services because personal care assistant agencies and other in-home care services need to charge more to staff up.
“Assisted living struggles to pay caregivers because they can make more money in another job,” Wight said. “You’re taking care of an older person’s bodily functions, or you can go down the road to Amazon and make five dollars more an hour.”
Personal care assistants to help with everyday tasks like dressing, food, cleaning and mobility to help an elderly disabled person remain at home instead of in an assisted living facility. Unlike nursing services, this is not covered by Medicare leaving customers to find other ways to pay.
The flip side isn’t much cheaper. Independent living and assisted living facilities have high prices to accommodate the extra medical staff and their rising wages, programming and food costs. Taking a look at their budget, this leaves people like Jan and Valerie wondering how they can afford their next step.
“If they put us away in the home we still have to get a two-bedroom even then,” Jan said, joking to Valerie.